Position Sizing: Matching Lot Size to Your Risk
Risk warning: Lot size controls risk more than entry does. This is education, not financial advice.
Position sizing means picking the right lot size so your risk fits your stop loss.
Two traders can use the same stop, but the one with a bigger lot loses more.
The simple formula
- Decide account risk — for example 1% of ₦15,000 / ~$10 = ₦150.
- Decide stop distance — for example 20 pips.
- Pick lot size so that 20 pips ≈ ₦150.
- If 1 micro lot = ₦15 per pip → 20 pips = ₦300 (too big). Use smaller.
- If 1 cent lot = ₦1.50 per pip → 20 pips = ₦30 (very small) — you can try a bit larger.
Most beginners use the wrong lot and the right stop. Flip it: use the right lot for your stop.
Learn pip values in Pips and Lots: The Two Numbers That Control Your Risk.
Why this matters for small accounts
A ₦15,000 / ~$10 account cannot afford standard lots. One 20-pip loss on a standard lot is about ₦30,000 — double your account.
Use a Cent account and micro/cent lots. See Account Types: Cent, Standard, and Which Fits a Beginner.
For funding, see How to Deposit from GTBank and Access Bank and USDT via Binance P2P.
Rate used: ~₦1,500 / $1. Small amounts like ₦150 use same rate.
Bottom line: Match lot size so your 20-pip stop equals ₦150 (1% on ₦15,000 / ~$10), or you risk a small stop costing big naira. Links To Guides: Pillar 2 (Money), Pillar 3 (Beginner Setup).